AMD deal with IBM appears to end earlier alliances

AUSTIN, Texas  Advanced Micro Devices Inc. has switched partners again, announcing Wednesday (Jan. 8) that it will work with IBM Microelectronics to co-develop process technology at the 65-nanometer and 45-nm nodes.

The deal apparently marks an end to AMD's arrangement with United Microelectronics Corp., a Taiwan-based foundry with which AMD was to develop process technology and build a 300-mm fabrication facility in Singapore. Asked about that earlier partnership, an AMD spokesman said the two sides "are amicably winding up their joint development relationship."

AMD is reevaluating its options for manufacturing on 300-mm wafers, the spokesman said, noting that AMD's plan, announced last January, to jointly build a 300-mm fab in Singapore with UMC was only a memorandum of understanding.

The depressed market for PC processors has impacted all of AMD's plans, but the company still plans to bring up its 65-nm process on 300-mm wafers by the second half of 2005, the spokesman said.

"UMC has been a great foundry partner, and our foundry relationship with them continues for other areas. But at this time we are exploring our options for 300-mm manufacturing," he said.

On Thursday, a spokesman at UMC said no final decision had been made about the potential AMD-UMC joint venture. He also said the foundry would continue its 65-nm and 45-nm node development with Infineon Technologies AG. The two companies have been working together for years on process technology and are partners in a Singapore-based 300mm wafer fab, called UMCi, which will fire up during the first half.

AMD will relocate a substantial number of engineers to IBM's silicon development facility in Fishkill, N.Y., and joint development work will start later this month.

Before 2002, Motorola Inc. was AMD's collaborator on logic process development, including work on copper interconnects and silicon-on-insulator (SOI) technology.

While Wednesday's announcement by AMD and IBM mentions SOI as part of the joint development agreement, the subject of strained silicon was absent from the company's press release.

IBM plans to combine SOI and strained silicon technologies at the 65-nm node, making it likely that AMD will work with IBM, rather than AmberWave, on strained silicon technology. IBM and AmberWave are rivals in the strained silicon arena.

The AMD spokesman said he was aware that AMD had worked with AmberWave "at one point," but was unsure if the relationship continues in the wake of the AMD-IBM deal.

The deal with AMD is the second time IBM has muscled its way into UMC's turf. IBM is making Xilinx Inc.'s most advanced FPGAs at 90-nm design rules, encroaching on the Xilinx-UMC foundry relationship, which continues.

The announcement also raises the question of whether IBM and another of its joint development partners, Chartered Semiconductor Manufacturing, will work with AMD on 300-mm manufacturing. In late November, IBM and Chartered announced a deal to collaborate on 90-nm and finer process technologies, and to share 300-mm manufacturing capacity as well.